Birmingham slides down city growth league table
Birmingham has fallen five places in a league table of the UK’s fastest growing city economies, according to latest figures.
The UK Powerhouse study produced by law firm Irwin Mitchell and the Centre for Economics and Business Research (Cebr) provides an estimate of GVA growth and job creation in 45 of the UK’s largest cities 12 months ahead of the Government’s official figures.
According to the latest report, Birmingham’s economy grew by 1.6% in the 12 months to Q2 2017. The slowdown in the rate of growth compares to a 2.1% increase in GVA within the city during the previous quarter. The quarterly fall in output has been blamed on the weak performance of the production sector.
Coventry’s economy grew at 1.5% in the 12-month period, while Wolverhampton’s increased by 1.2%.
In a period where locations in the South East and the East of England dominated, Milton Keynes came top with GVA growth of 2.6% in the year to Q2 2017 on the back of its booming technology sector and its track record for encouraging start-ups.
UK Powerhouse highlights the growth of Birmingham’s technology sector, with the latest figures revealing that the value of goods and services produced between 2012 and 2015 grew by 25%. This compares favourably to a national average of 14%, however, the report does show that the sector only contributes to 4% of the city’s total economic output.
It is further predicted that the number of jobs in the technology sector UK-wide will increase by 24% in the next 10 years. However, the report raises concerns that the true potential might not be realised.
It recommends that in order for the 45 cities to benefit from the available opportunities in the tech sector they should adopt a holistic approach.
The recommendations include:
· Tackling the shortage of highly skilled employees by encouraging more women to enter the industry
· Investing and opening more ‘code academies’ to increase the number of people with the necessary skills in programming languages
· Establishing a plan that allows the existing data flows between the UK and the rest of Europe to continue before the UK officially leaves the EU
· Expanding the Start Up Loans scheme for new business ideas by providing financing deals which offer higher amounts on lower interest rates
· Changing the current UK entrepreneur tax relief scheme as it encourages small firms to sell out early and inhibits the number of businesses reaching unicorn size
· Funding knowledge sharing and skill building platforms, including events for new businesses to network and discuss ideas with successful technology entrepreneurs